Hacker News Reader

Comment by ChainOfFools | Hacker News Reader

I happen to have a client right now who is in the midst of a massive downturn in business but is also obligated to pay for our services at a rate negotiated more than a year ago when they were in the midst of a brisk upswing in business; an upswing that had been going on for several years with no obvious indication that it would ever change.

Our services, though immensely useful, are not absolutely necessary for their business to function and frankly are much more of a burden than a benefit for them at this point. Yet they cannot refuse to do business with us, and must pay for services that are unnecessary every month until either this obligation becomes part of what kills them, or their fortunes return to the state they were in a year ago.

I'm sorry, but your belief is simplistic, shallow and naieve to the realities of business and trade as they are actually practiced.

View on HN

> Yet they cannot refuse to do business with us...

I obviously know little about business and "trade", because this strikes me as odd. I mean, I get that it's contractual, but how could a well-written contract not anticipate a time when doing said business with you would be detrimental to the company forced to pay...

And, long term, such a situation hurts both parties, because if "this obligation becomes part of what kills them", the business on the receiving end also loses a customer.

It’s how SaaS and most business contracts operate. Only tiny personally negotiated ones will have downturn provisions - and many companies have never experienced a downturn.

Incidentally, how do you handle such a situation?

I'm a bad business man and would probably let them off the hook for a while so they can recover. In my dreamworld this will build significant amounts of longterm goodwill.

During COVID lockdown, I asked my boss how things were going for our customers, suspecting it might be bad.

Fortunately most managed just fine, however a few of our customers really struggled as they had almost zero income due to the lockdown. These had asked for a pause of the SaaS contract they had with us.

My boss agreed to this, after all these had been good customers for years and if they survived would likely still be.

Of course my boss was in a relatively comfortable position, given that our other customers were doing fine, so we had plenty of income.

Now, if the downturn was more self-inflicted that kinda changes things a bit I guess. Still, we operate in a niche market, so my boss makes a point to keep good relations with our customers as the people tend to shuffle around between the companies in the niche.

Just ask all the companies with expensive office leases whether they can get out of their contracts on the basis of hardship. Their answer is RTO.

RTO = recovery time objective?

I'm confused!

"Return to office."

This looks like an argument against enforcing long term contracts, not against trade.

Reply on news.ycombinator.com